GameStop (GME) Stock: Falls 4% as Earnings Beat but Revenue Comes Up Short

TLDR

• GameStop reported Q3 adjusted earnings of $0.24 per share, beating the $0.20 estimate and up from $0.06 last year
• Revenue fell 4.6% year-over-year to $821 million, missing Wall Street’s $987.3 million forecast
• Operating expenses dropped to $221.4 million from $282 million, driving adjusted operating income to $52.1 million versus a $24.6 million loss last year
• Bitcoin holdings were valued at $519.4 million at quarter end, down slightly from $528.6 million in Q2
• GME stock dropped 4-5% in after-hours trading following the earnings miss

GameStop posted mixed third-quarter results that sent shares tumbling in after-hours trading. The video game retailer beat earnings expectations but fell short on sales.

The company reported adjusted earnings per share of $0.24 for Q3. This topped Wall Street’s consensus estimate of $0.20. Last year’s third quarter saw earnings of just $0.06 per share.

Revenue told a different story. GameStop brought in $821 million for the quarter. Analysts had expected $987.3 million. Sales declined 4.6% compared to the same period last year.

GameStop Corp., GME

GME stock fell roughly 4-5% in extended trading following the announcement. The shares had been climbing recently, up more than 2.5% in December. Year-to-date performance remains down 26%.

The earnings growth came from tight cost management. Selling, general, and administrative expenses totaled $221.4 million. That’s down from $282 million in the prior-year quarter. Management has clearly prioritized streamlining operations.

Operating Performance Shows Improvement

Adjusted operating income reached $52.1 million for the quarter. This marks a turnaround from last year’s $24.6 million loss. The improvement reflects both cost cuts and operational efficiency gains.

The softer sales numbers point to weaker demand in core retail operations. The 4.5% revenue decline follows a mixed year for the company. Second quarter revenue had jumped 22% year-over-year. First quarter revenue dropped 17%.

GameStop’s digital asset strategy continues to evolve. The company holds Bitcoin as part of its treasury management. These holdings were valued at $519.4 million at the end of Q3.

The Bitcoin position decreased slightly from Q2’s $528.6 million valuation. GameStop began buying Bitcoin earlier in 2025 as part of its investment approach.

The meme stock favorite has shifted focus toward profitability. Cost discipline appears central to current strategy. The company cut operating expenses while maintaining its digital asset holdings.

Revenue weakness came despite the company’s restructuring efforts. The retail environment for video games remains challenging. Physical game sales continue declining as digital downloads gain share.

GameStop’s expense reduction delivered bottom-line results. The earnings beat showed progress on the profitability front. However, the top-line miss raised questions about growth prospects.

The after-hours trading response showed investor concern about sales trends. Wall Street had expected higher revenue numbers. The miss of nearly $166 million represented a gap of about 17%.

Bitcoin Holdings Remain Stable

The company’s Bitcoin holdings stayed relatively flat quarter-over-quarter. The slight decline from $528.6 million to $519.4 million reflects market price movements. GameStop has not disclosed whether it bought or sold any Bitcoin during Q3.

Adjusted operating income of $52.1 million marked a substantial year-over-year improvement. The swing from a loss to a profit demonstrates progress on operational efficiency.

Third-quarter results came as the stock showed some recent momentum. December gains reversed some of the year’s losses. The shares remain well below their 2024 starting point.

The video game retailer continues navigating a changing industry. Digital downloads and streaming services are reshaping how consumers access games. Physical retail locations face ongoing pressure.

GameStop’s cost-cutting measures are working on the profit side. The company reduced SG&A expenses by over $60 million year-over-year. This helped deliver the earnings beat despite lower sales.

At quarter end, GameStop’s Bitcoin holdings were valued at $519.4 million, representing a core component of the company’s current balance sheet strategy.

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